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Question
State whether the following will be debited or credited in the revaluation account.
- Depreciation on assets
- Unrecorded liability
- Provision for outstanding expenses
- Appreciation of assets
Solution
- Depreciation on assets – Debited
- Unrecorded liability – Debited
- Provision for outstanding expenses – Debited
- Appreciation of assets – Credited
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RELATED QUESTIONS
Shanti, Samadhan and Sangarsh were sharing profits and losses in the ratio of 7: 5: 4. Their balance sheet as on 31st .03.2013 was as follows:
|
Liabilities
|
Amount
|
Assets
|
Amount
|
|
Capitals:
|
Furniture
|
17000
|
|
|
Shanti
|
23000
|
Machinery
|
18000
|
|
Samadhan
|
15000
|
Building
|
16000
|
|
Sangharsh
|
12000
|
Cash
|
37000
|
|
Bills Payable
|
4000
|
||
|
Creditors
|
8000
|
||
|
Loan
|
10000
|
||
|
General Reserve
|
16000
|
||
|
88000
|
88000
|
Find the Odd one.
The Balance Sheet of Sahil and Nikhil who share profits in the ratio of 3: 2 as on 31st March 2017
| Balance Sheet as on 31st March 2017 | |||||
| Liabilities | Amt. (₹) | Amt. (₹) | Assets | Amt. (₹) | Amt. (₹) |
| Creditors | 60,000 | Furniture | 60,000 | ||
|
capitals: |
|
Building |
72,000 |
||
|
Sahil |
80,000 |
|
Debtors | 40,000 | |
|
Nikhil |
1,00,000 |
1,80,000 |
Closing Stock | 48,000 | |
| Cash in Hand | 20,000 | ||||
| 2,40,000 | 2,40,000 | ||||
Varad admitted on 1St April 2017 on the following terms :
1. Varad was to pay 1,00,000 for his share of capital.
2. He was also to pay 40,000 as his share of goodwill.
3. The new profit sharing ratio was 3:2:3
4. Old partners decided to revalue the assets as follows:
Building 1,00,000, Furniture- 48,000, Debtors - 38,000 (in view of likely bad debts)
5. It was found that there was a liability for 3,000 for goods in March 2017 but recorded on 2nd April 2017.
You are required to prepare:
a) Profit and Loss adjustment accounts
b) Capital accounts of the partners
c) Balance sheet after the admission of Varad
Mr. Amit and Baban share profits and losses in the ratio 2:3 respectively. Their balance sheet as on 31st March 2018 was as under
| Balance Sheet as On 31st March 2018 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | 1,40,000 | Cash | 110,000 |
| Capital: | Land and Building | 50,000 | |
| Amit | 100,000 | Plant | 60,000 |
| Baban | 100,000 | Furniture | 4,000 |
| Stock | 100,000 | ||
| Debtors | 16,000 | ||
| 3,40,000 | 3,40,000 | ||
They agreed decided to admit Kamal on 1st April 2018 on the following terms:
1. Kamal shall have 1/4th share in future profits.
2. They agreed to admit Kamal as a partner on 1st April 2018 on the following terms:
3. She shall bring 50,000 as her capital and 40,000 as her share of goodwill.
4. Land and building to be valued at 60,000 and furniture to be depreciated by 10%
5. Provision for bad and doubtful debts is to be maintained at 5% on the sundry debtors.
6. Stocks to be valued 1,10,000 The capital A/c of all partners to be adjusted in their new profit and loss ratio and excess amount be transferred to their loan accounts.
Prepare profit and loss adjustment A/c, Capital A/cs, and New Balance Sheet.
Rajan and Selva are partners sharing profits and losses in the ratio of 3 : 1. Their balance sheet as on 31st March 2017 is as under:
| Liabilities | ₹ | ₹ | Assets | ₹ |
| Capital accounts: | Building | 25,000 | ||
| Rajan | 30,000 | Furniture | 1,000 | |
| Selva | 16,000 | 46,000 | Stock | 20,000 |
| General reserve | 4,000 | Debtors | 16,000 | |
| Creditors | 37,500 | Bills receivable | 3,000 | |
| Cash at bank | 12,500 | |||
| Profit and loss account | 10,000 | |||
| 87,500 | 87,500 |
On 1.4.2017, they admit Ganesan as a new partner on the following arrangements:
- Ganesan brings ₹ 10,000 as capital for 1/5 share of profit.
- Stock and furniture is to be reduced by 10%, a reserve of 5% on debtors for doubtful debts is to be created.
- Appreciate buildings by 20%.
Prepare revaluation account, partners’ capital account and the balance sheet of the firm after admission.
At the time of admission of a partner, what will be the effect of the following information?
Balance in Workmen compensation reserve ₹40,000. Claim for workmen compensation ₹45,000.
The account which is prepared to adjust the increase or decrease in the value of assets at the time of admission of a partner is called:
Karan and Saran are partners in a partnership. They admitted Mohit as a new partner for `1/4`th share in profits.
| Balance Sheet [Extract] | |||
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
| Creditors | 25,000 | ||
If 5% of creditors are not likely to claim their dues, what amount of creditors will be shown in the Balance Sheet on Mohit's admission?
Ram and Shyam were in partnership sharing profits and Losses in the proportion of 3 : 1 respectively. Their Balance sheet as on 31st March, 2020 stood as follows:
| Balance Sheet as on 31st March, 2020 | ||||
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Sundry Creditors | 80,000 | Cash | 80,000 | |
| Bills Payable | 42,000 | Sundry Debtors | 64,000 | |
| Capital Accounts: | Land and Building | 32,000 | ||
| Ram | 1,20,000 | 1,60,000 | Stock | 40,000 |
| Shyam | 40,000 | Plant and Machinery | 60,000 | |
| General Reserve | 16,000 | Furniture | 22,000 | |
| 2,98,000 | 2,98,000 | |||
They admit Bharat into partnership on 1st April 2020. The term is that
- He shall have to bring in cash ₹ 40,000 as his Capital for 1/5th share in future profit and ₹ 20,000 as his share of Goodwill.
- A provision for 5% doubtful debts to be created on sundry debtors.
- Stock should be appreciated by 5% and Land and Building be appreciated by 20%.
- Furniture to be depreciated by 20%.
- Capital Accounts of all partners be adjusted in their new profit-sharing ratio through Cash Account.
Prepare:
- Profit and Loss Adjustment Account
- Partners' Capital Account
- Balance Sheet of the new firm.
X and Y are partners in a firm with capital of ₹ 18,000 and ₹ 20,000. Z brings ₹ 10,000 for his share of goodwill and he is required to bring proportionate capital for 1/3rd share in profits. The capital contribution of Z will be ______.
